By Elena Fabrichnaya

MOSCOW Russia's biggest bank Sberbank expects a sharp cooling of the mortgage market following an expected 80% rise in mortgage lending this year, CEO German Gref said on Wednesday.

Gref said the bank's mortgage issuance for the whole of 2023 was expected to reach 4.6 trillion roubles ($50.1 billion).

"Despite the fact that we will most likely see a serious cooling in the near future, 2023 can still be called a successful year for the Russian mortgage market," he said at a financial forum in Moscow.

The central bank last month increased its key interest rate by a higher than expected 200 basis points to 15% in response to inflationary pressure and a weak rouble, and has now hiked by 750 bp since July.

Sberbank said on Tuesday it expected record profits this year but anticipated a slight decrease in corporate lending and a significant slowdown in retail.

VTB, Russia's number two bank, expects mortgage loans across the entire sector to total 7.2 trillion roubles this year, falling to between 5 and 5.5 trillion roubles in 2024.

Vyacheslav Dusaleyev, head of retail business at Rosbank, gave corresponding forecasts of 7.3 trillion roubles this year and 5 trillion next year.

"In 2024, mortgage issuance will decrease by 30% compared to 2023 and will return to indicators comparable to the results of 2022," he said.

Mortgage demand has remained buoyant in part because of the wide range of preferential offers available, according to the central bank. But Deputy Governor Olga Polyakova told the forum that the central bank believed there should only be a single preferential programme for those who really needed help with housing.

(Reporting by Elena Fabrichnaya, writing by Mark Trevelyan, editing by Christina Fincher)